NAVIGATING THE ENIGMA OF STOCK APPRECIATION RIGHTS FOR INDIAN UNLISTED COMPANIES AMIDST THE DARK WAT

Author : Rishi Batta | Published On : 24 Apr 2024

At the threshold, SARs appear to be, and are indeed, a promising win-win model wherein the company can have substantial control over risk exposure and capitalization table while the beneficiary of SARs can get an exit in cash at the market value or corresponding shares of the issuer company or both, as applicable, all of which is relatively less onerous than the conventional routes of subscription and / or purchase of shares or ESOP (as defined hereinafter).

However, a deep dive into the legal, contractual, and regulatory nuances of SARs under Indian law, particularly with respect to the eligible beneficiaries of SARs issued by unlisted companies, indicates a faint but lingering possibility of regulatory invasion and arbitrage, as has been dealt with further in this article.

Read More: https://tlegal.com/blog-details/navigating-the-enigma-of-stock-appreciation-rights-for-indian-unlisted-companies-amidst-the-dark-waters-of-statutory-hush